The Housing Bubble

Wholly immoral and unethical.

Additionally, simply because something is allowed under the law, it does not necessarily follow that it is moral or ethical. In fact, most of the rules by which we live by and which allow us to live among one another are derived from non-legal sources such as our senses of fairness and right and wrong. When these break down, so does society.

Finally, what happens when the next house she “buys” loses another 50% of its value?

Additionally, simply because something is allowed under the law, it does not necessarily follow that it is moral or ethical.

It’s not a matter of being “allowed under the law”, it was agreed to in a contractual agreement between two parties. Statutory provisions like non-recourse form part of a contract. If the lender wants protection against walkaways it can demand - the horror - a down payment.

yogurt– Or, if they dislike statutory provisions, they can simply not write loans in that state. In this day and age of interstate banking, that is an option.

Immoral and unethical never stopped Wall Street, RE agents or mortgage brokers. What’s good for the goose is good for the gander.

Maybe a few of you haven’t noticed yet, but we are in the early throes of the breakdown of our society…

The easy indicator is the increase in non-violent theft in the wee hours, when nobody’s looking. All over the country.

Going green, recycling.

Manhole covers that cost $500 to replace, are going away in droves all over the country (600 in Philly in 1 year). The perps get $10 to $15 per manhole.

A whole house worth of copper piping might net a few hundred bucks @ the scrap dealer, but renders a house unsaleable, most excellent for squatting.

There’s a few hundred bucks of Platinum in a catalytic converter, and it takes a few minutes to creep under a larger SUV and convert it into cash (the perps make off with $25). You need a new converter, however.

Car break-ins via the tried and true rock through the windowshield, have shattered previous records.

Statues made of stone are safe for the time being, as they have no scrap value, but heavy metal is in. How did a 15 foot high Copper statue of a miner ‘49′r stay unmolested in Los Angeles from 1925 when it was erected, until earlier this year, when thieves decapitated him @ his knees and made off with his Gold?

Electric lines use a lot of Copper wire, which isn’t worth the risk of getting yourself fried, but the perps will not be denied.

“Finally, what happens when the next house she “buys” loses another 50% of its value?”

She won’t be able to do it with a third loand because her credit report will show a walk away from the first one. With a non-recourse loan, the lender is obliged to take the security in lieu of payment, but it isn’t obliged to make such a loan to a person who has shown herself to be highly likely to do the walking if they don’t want to. If the lenders bothered to look at the circumstances of the first and second loans, they would have known not to make those too, but it doesn’t mean they didn’t know the rules before they did it.

Maybe a few of you haven’t noticed yet, but we are in the early throes of the breakdown of our society… I don’t believe this, crime has always been with us & is just getting a lot more press and internet coverage than ever before.
Or, as Firesign Theater said:
Corn from the Indians,
Squash from the Indians,
Coal from the neighbor’s back yard!

‘I tell you, people are smart and adaptable. You’ve got to give them that…’

I only agree with the adaptable part. People ARE adaptable. But then, so are slime-molds.

I tend to think it may be “unethical” to enter into a contract for the sole purpose of using an agreed upon exit option, and not with the good faith of completing its primary goal (to pay off the house.)

However, it’s perfectly legal!

What’s 100% IMMORAL and UNETHICAL, but also legal, is the fact that the government subsidizes this behavior! For example, you get a mortgage for $500,000. You walk away. Bank sells it for $300,000. Issues you a statement saying you earned $200,000 in “forgiven mortgage debt”

In a just society, you’d have to pay $70,000 federal income taxes on that very real income–the forgiven debt. But congress passed and the President signed a bill making forgiven mortgage debt nontaxable.

There’s really no difference between giving someone a $70,000 tax break and writing someone a check for $70,000. Can you imagine the outrage if the average citizen understood that the U.S. government is writing checks for $70,000 to get-rich-quickers?

I understand a no-recourse loan. It even makes some sense when buying a house in normal times. The banks were idiots for not requiring a 20% down payment. In fact, if they did, we wouldn’t be in this mess!

It’s obvious that your real name is not Donald Trump.

“2. Calling a “Spade a Spade” is a euphemism for calling a black person a n*gger, it has nothing to do with shovels, so you may want to drop it from your vernacular.”

Really? I thought it was a card (diamond, hearts, clubs…) reference.

re: 2)

Maybe in your neck of the woods. It’s long since been generalized into another version of “if it walks like a duck…” for the majority of the US, though.

Took a look at Wiki on it.

Looks like it was sort of about shovels originally (more about being direct, as Olygal intended), then later was used as a slur. Never about cards.

http://en.wikipedia.org/wiki/To_call_a_spade_a_spade

Good. Then we don’t need to go into the origin of the term “nitty gritty”.

Google it. Not appropriate for a family forum.

I’ve lived in the south my whole life and never heard that. Maybe it’s a yankee/westerner thing. Those folks I think have a tendency to turn everything into racism.

It is not a racial slur:

http://www.yaelf.com/aueFAQ/miftocllspdspd.shtml

It derives from an ancient Greek expression: _ta syka syka, te:n skaphe:n de skaphe:n onomasein_ = “to call a fig a fig, a trough a trough”. This is first recorded in Aristophanes’ play _The Clouds_ (423 B.C.), was used by Menander and Plutarch, and is still current in modern Greek. There has been a slight shift in meaning: in ancient times the phrase was often used pejoratively, to denote a rude person who spoke his mind tactlessly; but it now, like the English phrase, has an exclusively positive connotation. It is possible that both the fig and the trough were originally sexual
symbols.

Joe Lawyer, the top part of the post you responded to was from ‘Jeff’. Hence the ‘Comment by Jeff’ part that you may perceive, should you re-read my post.

I personally don’t find anything wrong with America today. It has been quite a lovely Wednesday so far.

They may have made their bed, however all of us are going to end up sleeping in it. Bob meet Carol, Carol meet Ted, Ted meet Alice, etc..

Of course we know that in recent years, the rules were exercised to reward those who were perpetrating fraud.

They should care because it helps promote the atmosphere that people can walk away from their current loans, as well.

I’m suprised people can easily qualify for a the escape home easily enough with another home (without any equity) already on the books — isn’t underwriting supposed to be getting tougher?

That reminds me of companies who like to issue credit cards and consumer loans to people a few years out of BK because the consumer will have to wait x number of years to BK again.

It’s like sleeping with a woman who is already pregnant, is she going to become more pregnant by you?

If banks were properly qualifying the mortgage applicants, they should be able to quickly see that the income levels don’t support holding another loan. This is precisely why FICO and credit scores alone cannot be used, but the bank should be looking at income and assets as well. I agree the FB is doing something borderline fraud and immoral, but this is the bank’s money and they need to do some due diligence. We don’t think much of an investor who loses his shirt buying into a CEO’s hype and never bothered to check their financial statements… this isn’t that different.

Was at mortgage brokers, for loan for new house prior to selling old. They say that the second lien (65%+25%+10% down) might not accept the offer letter of my new job for salary verification. OK, I say, if that happens, I’ll just go with a 90%+10% down loan. The broker didn’t look too enthused… why? I realized right after I said it, that it was likely because instead of a no brainer 65% first lien he’d then have the risk of a 90% first lien. Apparently, they were able to make the second lender happy.

Well, at least they poked into our finances before approving us. Progress, even if of the “small steps” variety.

“When I worked as a comissioned salesperson at Sears, they had a system in place to prevent this behavior.”

When I worked for a used car dealer, thye made a ton of money from the banks by charging higher interest rates than the customer qualified for. Standard practice really, though sometimes the spread might be up to 4%. If the customer signed the papers, walked out and refinanced a week later, the bank would charge the finance premium back to the dealership - we’d just get a big statement and have to research which deal came from which F&I salesman.

Management didn’t really care enough to put a good system in place to charge those back to the salesman, probably because turnover was so high. By the time we got the bank statement, half the sales staff had changed anyway.

How dare you link something unfavorable about Obama. He’s going to save our country - I mean, didn’t he use the word “change” in one of his speeches?

But God forbid anyone vote for Ron Paul, that guy is nuts - he calls for change, but sounds like he actually means it.

Sarcasm off//

“But God forbid anyone vote for Ron Paul, that guy is nuts - he calls for change, but sounds like he actually means it”.

And can lay out his plan, I’m writing him in. If people think he’s a nut imagine what they would think if Thomas Jefferson were standing on the podium today?

“…appointees whom he has assigned the most important and intimate of tasks”

Vice President….Oh, its so critical, lets all be afraid, lets get really worried & lose some sleep over it.

Here’s the Republicans problem regarding the current War Czar:

“…his favorability ratings are near toxic lows.”

“Dickey Boy” might as well spend Martin Luther King day duck hunting in Crawford Texas.

http://news.yahoo.com/s/politico/20080611/pl_politico/11000

“She started it!”
“Did not”
“Did so”
“Did not”
“Did so”
……….Huge slap with a 20# trout…..thud…(body slams to the floor)
“dazed / moaning”………..”I’m telling Dad”

running /yelling: “Beeeeeeeeeeeeeeeeeeeeennnnnnnnnnnnnnnnn!”

McSame was just on TV saying that he supported housing bailouts, economic stimulus packages, and windfall profits on the oil companies…but is sure is convenient to only paint Obama with that brush!

The Reps are completely blind to the evils of their own, which is why they got (and continue to get away with) raping the country.

With Obama at least we have a *guarantee* that there will be some changes of some sort (how could there NOT be?) . . . all government is corrupt, but at least he will bring something new . . . so bored with the complacent people who don’t think the current legacy needs to be thrown out on its @SS!!!!!! : )

How dare they lie to us about EVERYTHING and still have supporters? sheeple, sheeple, sheeple baaaaaaaah

‘McSame’

That’s funny. May I borrow that?

If people think he’s a nut imagine what they would think if Thomas Jefferson were standing on the podium today?

In Jefferson’s time the president was not popularly elected.

He was also not a Christian, which all by itself would make him unelectable today, if not in his own day.

http://en.wikipedia.org/wiki/Jefferson_Bible

They are both very nice candidates, but they both talk a lot. Wear a gaffe mask and a gag bib while listening to them for the next five months.

Under Obama’s plan, I’ll get to keep 35 cents of every additional dollar I earn. Is that the “change” he keeps talking about?

Reminds me of a saying probably spoken by each of your mothers, “If your friends all jumped off a bridge…”

I believe that I also recall some Nazi concentration camp guys kind of saying the same thing, “Well, everyone else was doing it…”

Hmmmm….. murder and thievery are the same?

pleeeez…

“Ostriches” comment was valid & useful. Hmmmm….. murder and thievery are the same? is just a pot shot.

In your opinion. Thank you.

When MANY seniors are forced to choose between the medicine that keeps them alive or food, you’re goddamn right they are the same thing.

My mom was a good Republican™ for over 50 years, but she sent the last request from them back with a huge “f*ck you!”

Comment by exeter
2008-06-11 08:06:23

pleeeez…

When we have seniors, way too many seniors, who have to regularly choose between buying food and buying lifesaving medicine, you’re G0DD@MN right they are the same thing.

Great post, Michael.

And nhz, I really don’t think we should let the shareholders off the hook either. The whole problem with corporate law and the principle of limited liability is that it encourages providers of capital to look at their investments purely as a numbers game, and to turn a blind eye to any questionable, immoral, or downright evil behavior on the part of corporate management.

When you invest in stock, you are assisting a business enterprise in what should be honest and productive economic work. If this enterprise takes a wrong turn and engages in corrupt and immoral behavior, there is no justice in allowing stockholders to ignore that behavior and escape blame. Real reforms here should start by repealing corporate law and limited liability.

Well said LVG. People that own these stocks want zero liability for the actions of their companies and gauranteed returns. It’s sickening. Let the owners go down with their miserable companies.

LVG: I agree regarding shareholders in general, but the reality if far more difficult. The Dutch pension fund ABP is one of the big players in the worldwide shares and mortgage markets (they even own a few big hedgefunds). ABP invests the pensions of government workers who have close to zero influence regarding investment policy, even though THEIR money (future pension) is at stake.

I know some guys who have asked questions about this to the management again and again, e.g. regarding the huge investments in US mortgage paper, but management does not listen (in fact they usually even refuse to answer questions about those kinds of subject). Management is appointed by politics and not by the ’shareholders’.

If the pension fund management gambles away the money, the Dutch government will probably increase taxes so that pensions for the government workers are guaranteed (after all there are many politicians among those workers). The managers will be fired with multi-million euro golden parachutes in the worst case, and probably they will all keep their well-paid jobs despite stupid decisions. For those in charge of investment decisions there is zero risk and liability - so they will simply continue investing in the favorite sh** of their bankster friends, like US mortgage paper.

Real reforms here should start by repealing corporate law and limited liability. I doubt this will happen, there are sound reasons behind the existence of corporations, think of hospitals, colleges, sewer districts, etc., which perform vital functions hard to duplicate in other ways. However, corporate law needs drastic revision, including a corporate death penalty for those entities which behave destructively towards the society at large. They shoot horses, don’t they?

Real reforms here should start by repealing corporate law and limited liability.

HERE HERE! A good start would be that money != Free speech when it’s from a corporate entity, and that the rights of the legally fictitious corporate “person” should NEVER exceed those of actual people. In fact they should be legally subordinate to actual living people.

As for hospitals, colleges, and sewer districts, I would agree to having an exception to the limited liability “clamp down” for them as long as they are non profit, and perform some sort of REAL public good.

Every January, Tucson has a celebration called Dillinger Days. It commemorates the capture of outlaw John Dillinger (who was part of the Pierpont Gang of bank robbers) back in 1934.

This year’s celebration included a talk by a retired Tucson Fire Department captain who’s also a historian. At the beginning of his talk, he asked us to name some notable bank robbers from the Depression era. Of course, everyone rattled off John Dillinger’s name.

Then the other names started flying. Pretty Boy Floyd. Bonnie and Clyde. Al Capone. Baby Face Nelson.

And why, after all these years, are these names still so familiar? Because those guys and gals had become folk heroes. After all, back in the 1930s, people were losing their farms and their homes because they couldn’t afford them any longer. The banks were taking them back, and believe me, that sure didn’t make the banks popular.

So, the bank robbers were the 1930s version of that latter-day expression, “Stick it to the Man.”

“In all my years of travel I’ve seen many funny men,
Some will rob you with a six-gun,
Some with a fountain pen.”

–Woody G.

It’s a populist political move, like raising the homestead exemption. At some point you can’t get any more out of people.

My own view is kinda nuanced: if an FB realizes they’re in over their head, dumps the house and goes back to renting, there’s some dignity in that. But if an FB is still trying to speculate & flip, thinks they can make a killing if they wait it out, is just going back for more, it’s more unethical than the FB who just plain bails.

These laws grew out of the Depression era, and was a populist response to personal liabilities after the bank takes your house. In theory, the lender should have priced the risk when making the loans.

It is a regulatory deterrent to banks to lend more than a house is worth according to historical standards. Because banks have the historical knowledge, experts, lawyers, etc… necessary to properly manage the transaction, and most individuals don’t, it puts the responsibility on the bank to make sure the transaction is honest and clean.

The system works well. Unless, of course, you deregulate the industry and allow the banks to slice & dice the mortgages into CDO’s, pay Fitch hush money to call them AAA, and sell them to foreign investors.

“I have never understood non-recourse states.”

I suppose an FB in a recourse state would have to file bankruptcy to erase any deficiency judgement. So part of the reasoning for non-recourse could be to discourage the FB from defaulting on other debts in addition to the mortgage. An FB filing bankruptcy is going to lump ALL their debts in the filing, whereas someone dropping off the keys in Cali may still be paying to keep their car, credit cards, etc.

I think those all make sense, but don’t match as well with the modern realities (good point Jon). If I had 20% skin in the game, then that was OK as a stop loss limit; I could see that. But if I have no money down and roll in the closing costs, other than my credit score/report, what do I have to lose? It seems to really encourage speculation. Does anyone have access to foreclosure stats broken down by recourse and non-recourse states? Not sure it would show much but would be interesting.

If the Banks are figuring it in to the deal, aren’t the rest of us responsible folks paying that premium? I’d take a recourse loan at .50% or .75% less.

The homestead exemption is equally abusive in some states. Should I be able to walk away from bills, Judgments, you name it, and still keep $500,000 equity in my house? Try explaining this to a small painter, plumber, contractor whose $15,000 bill didn’t get paid and is SOL.

Just my 2 cents. All good points and thanks for the chance to have discussions of this stuff without the usual Internet flaming.

You mean she is going to be a delivery person who brings free food to the staff in doctor’s offices in return for the doctor (who gets to stiff staff on wages because they get breakfast and lunch for free) over or inappropriately prescribing her employer’s products?

That is one dirty business. And the scenario I described is the cleanest version. Old style is the doc get free vacations, theater tickets, etc. in exchange for over or inappropriately prescribing the products. Direct payments of cash are usually for giving speeches saying the drug is better than other, cheaper effective alternatives, but that happens above the level of the salesperson.

I worked with a guy that quit a lucrative pharmaceutical sales job because he said he couldn’t live with himself anymore while doing it.

I have a close friend who quit being a lawyer after 2 years because it was such a “negative line of work”.

Yen was 124/dollar last year and last Dec 31 was 114 to the dollar. I’ll take minor fluctuations in a crazy world knowing the fiscal responsibility and savings rate of the Japanese will more than make up for a crashing dollar. Nothing goes straight up or straight down.

Current purchasing power parity is 85Yen/dollar $1.17/1.00EU

Half my family is Japanese so I have a vested interest…

Island nation inflation:
why are the UK and Aussie yield curves fully inverted? Is this a new fangled bond theory of which has yet to be discovered?

even Japanese rates are moving higher…rational expectations of an inverted yield curve? \

its getting ugly out there…go long window locks and safety glass in high-rise Manhattan.

Hi Vozzie,

For the past 2 +years the Yen and S&P were opposites. Now the Yen is moving in tandem with the dollar. The fear is recession in Japan. A recession in Japan is not going to have the ill effects as would occur in the good ole USofA. Japan has a 31% savings rate. A lot of real money sitting on the sidelines. Something will shake Japan from the lethargy, but what or when I have no idea.

“It’s not possible to borrow your way to prosperity, either.”

Greenspan managed to convince an entire generation of boomers that the road to riches was to steal from their grandchildren.

Many of them post here, defending their right not to pay taxes despite their party spending like a drunken sailor on payday.

A drunken sailor on payday is limited to his pay. A borrow and spend government can get into a lot more trouble.

The upside is that Japan can effectively reduce its production capacity without reducing the standard of living of its citizenry.

Somehow any health care system that isn’t based on squeezing the most possible money out of people who are sick and dying is considered bad by many folks.

It isn’t like the current system is some free-market wonderland. It has been horribly corrupted by insurance monopolies and fraud.

I understand that in Canada one secretary can process the paperwork for two doctors. In the US, it is two secretaries for one doctor.

Ask any Canadian physician how independent they are, when they cannot set their own rates and get very little input into what services should be covered from year to year. When the only payer is the government, they are effectively employees.

You mean doctors in the US can bill the health insurers at any rate they want?

Right.

Ask any Canadian physician how independent they are, when they cannot set their own rates and get very little input into what services should be covered from year to year. Substitute “US” for “Canadian” in that statement & see what results you get. Walk into any hospital and ask them what they would charge you for a Complete Blood Count, at retail prices, and see how long it takes to get an answer, or whether you can even get an answer.

US physicians can negotiate their rate, or refuse to take medicare. Many do. Too many do, because they couldn’t stay in business with the rates that are paid.

What does a CBC have to do with a physician salary? That goes to the hospital.

The cost of a CBC is relevant to the compensation charged by or paid to any health provider & to the near-complete lack of transparency of costs & charges in the field.

The hospitals hire the doctors, nurses, x-ray techs, etc, not the government.

With some exceptions, the doctors are not employed by hospitals. They are self-employed as I pointed out. Few doctors in Canada work on salary except those in the military, or interns, etc.

Also the medical care system, although operated by the provinces, was set up as a federal-provincial compact with joint funding, so the federal government is a participant and not “meddling”. The provinces and federal government do argue about funding and standards, but that’s a proud Canadian tradition.

Under the Constitution Act, health care is a provincial responsibility. The Federal Govt introduced the Hospital Insurance and Diagnostic Services Act in 1957 as a power grab, but agreed to cough up 50% to get it (the joint funding part). I suppose meddling isn’t the best word, but either way the Feds bought their way into a provincial matter.

“No, Canada has socialized insurance.”

Excellent idiom Dani. Isn’t it interesting that the entire idea of insurance is to socialize the risk.

This is in fact the reason why the government medical care system in Canada is supported by all political parties. Big Business likes it. They can hire solely on talent and not have to worry about the medical risks of their employees. Small business likes it a lot too, because they would have the most trouble getting insurance for their employees under a private system.

Big Business likes it. They can hire solely on talent and not have to worry about the medical risks of their employees. Small business likes it a lot too, because they would have the most trouble getting insurance for their employees under a private system.

I keep wondering when non-healthcare industries in the US are going to figure this out for themselves.

I think the auto industry, with its untenable pension and healthcare obligations, already has — but it may be too late for them. In general, however, we have yet to see a eureka moment in the US business community regarding the practicality of healthcare reform.

Once Big Business embraces the idea en masse, no amount of Conservative Booga Booga The Sky Is Falling Red Scare Doublespeak will stop the push for serious healthcare reform. (It remains to be seen just how effective and well-designed those reforms will be, of course.)

“no amount of Conservative Booga Booga The Sky Is Falling Red Scare Doublespeak will stop the push for serious healthcare reform.”

Too funny but true. I’m always amazed at the warped (il)logic of that crowd.

I keep wondering when non-healthcare industries in the US are going to figure this out for themselves.

From what I am hearing, they have. And they have figured out that they need not lobby for heathcare reform. All they have to do is stop providing the insurance as a bennie and the reform will happen by itself.

“To nationalize all health care would be to ruin it.”

I agree except the fact that it’s already broken. I say no to nationalization and socialized health care.

The only thing that will get ruined are big pharma’s profits.

Last time I read the Constitution, there was no “right” to free health care.

Holy Strawman Argument Batman!

That’s not a strawman. You are copping out. You want socialized health care, move to a country that offers it. In America we were supposed to be responsible for our own actions and decisions, the alternative is for wimps. Folks that want socialized health care are moving us more along the road to serfdom.

They have. It’s called Medicare, and until George Boy took over, the VA system was very good. As lostcontrol points out, Medicare is much more efficient that private health care. And it covers a group with more health needs than the general pop.
Again, most Americans want Universal Health Care. Another thing the MSM hasn’t caught on to. Just as most Americans don’t give a damn about cap gains tax. But the Media will make this a big issue, since it helps McCain.

until George Boy took over, the VA system was very good Not according to many of the vets I have spoken to. The VA system is & has been better than nothing.

I wonder if they have as many people with @sses the size of refrigerators…

Correlation, not causation, CG.

Excuse my “reply” post status. I watched the Documentary “Sick Around The World” and learned about 5 other countries and how they work their universal healthcare (Canada not covered), and it educated me on the pros and cons. Our system is broken. We rank 37th in healthcare in the world.

http://www.pbs.org/wgbh/pages/frontline/sickaroundtheworld/

Yes, I made that same point a month or so ago. If gas were $10 a gallon, it would annoy me but wouldn’t change anything I do. If that small amount throws you off, you need to take a look at what you’re spending money on.

And yes, I know that would also make food prices go up.

Remember that those countries are much smaller then the US, and therefore, I would assume, far fewer miles driven

It has nothing to do with the size of the country. Americans don’t do all that driving between metropolitan areas, but within them. Isn’t that obvious really? Also the US states where most people live, like California or New Jersey, are just as densely populated as many European countries.

I will also point out that the UK has among the most miles driven per capita of any European country, but is one of the most densely populated. It has nothing to do with density and everything to do with the availability of quality public transit and proper urban planning.

far fewer miles driven (and NOT IN a dam* Escalade)

When I envision school textbooks 20 years from now I imagine that they will have pictures of Escalades and Hummers in the section about the great fuel crisis of 2009.

and increased driving in the UK has a lot to do with the UK housing bubble, where many simple workers are forced to drive 2 hours to work because closer to their work ALL homes are totally unaffordable. This is a very common theme in all the British home-buying shows on TV. Dismantling of the good public transport system by former ‘free market’ UK governments have made things even worse.

You got it! When I lived there in the UK, I was always living reasonably close to work (i.e. 5 or 6 miles, which can be as long as 1 hour in London peak hour!), but I had friends who wanted to own their own houses, and they lived waaaaaaaaay out. Some were 25 miles, some were over 50 miles away, like living in Wiltshire and working in London — madness!

Petrol costs were hurting them alive at 85p/litre; it has to be really bad now. But they just shifted their budgets to make room for the transportation costs. To them, it was worth it because of the lower housing costs out in the boondocks (such as “boondocks” are in a crowded place like England).

How much are these guys paid?

How much are these guys paid?

the gov workers that drive the big SUV’s? When they have been working for local gov. for 10-20 years and have a slightly above average job level, they make between 4000 and 10000 euros a month before taxes (1.5-4x median wage). Keep in mind that because of special taxes, Dutch price for these SUV’s is twice the US price…

But wages is only part of the story. Many of these workers probably own a city home that they purchased for 50-75K euros in 1980-1990, and which is now worth 500-1000K euros (with all gains tax free). With the average Dutch homeprice increase, people got a free SUV every few years …That is were most of this wealth on display is probably coming from. Sounds familiar?

If the Dutch housingbubble pops, walking or cycling in the city streets will be a much more pleasant experience than it is now

Glad to hear that its not just us with the HELOCs.

My income is definitely in that range, and I can’t afford those kind of cars, even though they are cheaper in the US.

Methinks that Chindia and other nations will more than make up for that reduction in consumption, many times over.

PENANG - Malaysians are reeling from a 41% rise in petrol prices and a 63% hike in diesel as Prime Minister Abdullah Badawi’s administration scrambles to ward off public discontent over his unpopular policy decision to remove fuel price subsidies

Violence erupted in Iran last week when Ahmadinejad’s government imposed gasoline rationing, limiting drivers to 100 litres (26.39 gallons) per month of petrol at the subsidized price of about $0.42 per gallon.

China announced that domestic price increases might be inevitable later this year in response to world markets — an acknowledgment that might prompt further fuel hoarding in China.

“Prices of crude oil, grains and other primary products are still rising on the international market, and China faces relatively large pressures of further price increases,” the announcement on the government Web site said.

June 2006
ndia, which imports 70 percent of its oil, increased prices for gasoline by 11 percent, diesel by 9 percent and cooking gas by 17 percent after oil reached a record $135.09 a barrel in New York on May 22. India previously raised fuel prices in February, the first time since June 2006.

Eventually consumption will fall in these countries as well.

Hey, screw “windfall profits tax”! I’ll vote for any candidate who promises to make all the gas I want available at my local pump for $1/gal.

Eventually consumption will fall in these countries as well.

Perhaps at a per car level, but they are adding millions of new cars to their fleets every year. Aggregate demand will continue to rise.

There are several other countries that are rivalling us, evevn exceeding us, and this is not even a new thing:

From the BBC back in 2004:

“Seven years ago UK households held as much debt as they were earning. Now outstanding debt stands at 135% of household income. “

From the Reserve Bank of Australia back in 2003:

“The household debt to income ratio has risen from 56 per cent to 125 per cent over the decade to end 2002.”

For some info from 2003 but very complete, check out this link and see the charts:
An International Comparison of Household Debt
(Warning for those who care - it’s a PDF)

That’s not to say that we don’t have a household debt problem. We do, and it’s bad.

Nova Sideliner:

I can add that in the Netherlands outstanding debt is a lot higher than in the US and UK, more than 200% of household earnings (’but’ as they always say here, ‘that is no problem at all’ because we have the most generous HMD in the world. Dutchies can service more mortgage debt than anyone, at least until the housingbubble pops or the tax office decides that homeowners have to start paying some income taxes just like other citizens).

Of course, I’ll note that since I covered all of my remaining shorts this morning, the probability of a catastrophic market plunge in the next 4-5 hours just went up substantially.

75% long via index calls. Short dated though, doubt any rally will last very long.

Waffle Dude: I like shorting the Nasdaq too and it always performs But once this sucker bottoms (which could be a year from now, who knows) that will be the place to buy and hold IMO.

Oh crap. Thanks for telling me before the Dow was down 150 points today! Would have been nice to let some of the rest of us exit our longs before you started the catastrophic plunge!!

Yeah, the Nasdaq short was a quick play. I’ve been long AAPL since last year. Held all the way down and then all the way back up. Been making a nice monthly “dividend” by writing out of the money calls since December ($190 for June). April almost bit me in the ass, though. Apple fanboy/fangirl irrational exuberance can be both fun and profitable.

“75% long via index calls. Short dated though, doubt any rally will last very long”

I lack the intestinal fortitude to play that kind of leverage in the dark on the side of a cliff. Rolled big into SSO in stages in the high 67s (about equal to 1341 on the S&P). Very tight stop in place.

Summer rally ?

They’re very Rust Belt towns, they just happen to be located in the exurbs of the Rust Belt.

It’s also a town with limited mobility…I grew up there, and a majority of people I went to high school with did not leave.

Another common element with the Rust Belt.

I like both Buffalo and Rochester (and Cleveland, Detroit, Dayton, etc.), but it’s hard for me to imagine making a decent living and raising a family in towns like that.

Halifax,
Lindbergh grade school in Kenmore, then Buffalo Sem. Left for college at 17, though still like the town a lot. Family is still there. My older brother owns a couple of rentals in north Buffalo, those 3 story Victorians with huge porches in the Central Park neighborhood. i don’t know what he thinks about them…he just shrugs.
My godfather went to Canada to join the British forces in 39.
Recruited by British intelligence,he spent the war in France working with the resistance. His French was lousy,but his contacts were Jesuit priests–his Latin was aces (courtesy of Nichols). That poem was handwritten and framed in his living room.

his Latin was aces (courtesy of Nichols)
____________________________________________

Hey! Some of us at Park studied Latin and calculus (believe it or not), and didn’t live like Paris Hilton..

I may have to revise my opinion about Nichols though.

We used to watch Spirogyra at the Central Park Grill for free at open mike before they hit the big time; we folled up and cooked ~500 eggrolls at their last free concert.

Does your godfather still have that handwritten framed poem?
I’ll bid for it on ebay.

Halifax,
he died about 12 years ago, I am sure his son has it now. Learned about his WW2 experiences from his obituaries…he himself never said a word, and never explained why he loved that poem. I knew its significance,but not why it was important to him.
ARe you in Nova Scotia? I watch RE there via Tradewinds…the runup has been stunning. What’s happening? How’s the weather now?

Sorry, ‘Halifax’ is named after the town of a former biz partner; am currently living in Alaska, where it’s in the 50’s and a bit cloudy, but beautiful all the same.

Hope is your godfather’s son is taking care of those framed lines from Verlaine - sounds like it was a turning point in your godfather’s life as well as world history.

Yeah, I have something lined up already. Writing a bigger rent check than I like isn’t fun, but it is better than riding a house down 10 or 15% next year. I thought about doing the squatter thing, but if Lost can’t even make it a week what chance do I have?

Presuming you’re speaking of Luzerne area, I now understand what you’re saying. That place is a true anomaly…. a conundrum by any description. I know that town like the back of my hand and I’ll say you’re likely correct in your previous assessment. I have NO idea what is sustaining RE in southern Warren and northern Saratoga counties. If you’ve been there a while, you’ll know that prices tripled since 2000, even in light of the fact that IP shut a mill in Corinth dumping 500 employees in 2002. That alone should of put out any potential fire but it didn’t. I can only surmise the NYC/NJ/CT crowd is supporting prices. If you ask a native Luzerne, most will say “they are all millionares in NYC and they all want to live here”.

The Red Wings didn’t sell out ’til it got to playoff time. But they thought it was a marketing problem.

Our local minor league hockey team has sold out every game for the past few years. Of course it helps that they are a strong team and that tix are only $18.

Too expensive? I’ll say!

Last time I was out with the family, it all added up to over $70 for three of us, and that was for a minor (Carolina) league game! I don’t even want to think what it would cost me to spend the evening at a Nationals game.

Oh, and forgot to add my agreement that yes, it is indeed easier for people like Trichet, with his single mandate, to say no to politicians who want monetary stimulus. That’s one thing the Euro has definitely has going for it.

“Is that a bologna or are ya just glad to see me…”

roflmao!!

Only “two” of your preferrred kind?

Your dream sucks too!

So THAT’S where you’ve been, shouldda known.

One does not live by words a loan, so occasionally you gotta go on a walkabout to keep things in perspective…

It is fine to sign if you are absolutely positive the bank will properly dispose of the records (burn or shred) when they no longer need them, or will even bother to figure out when they no longer need them. If you are only going to save about $50, IMHO is that the risk of identity theft isn’t worth it. Just pay off the sucker as fast as you can.

But do ask them about their document disposal policy and security measures. It would be fun to see what their response is to that.